“Social media’s greatest assets — anonymity, ‘virality,’ interconnectedness — are also its main weaknesses.”
– Evgeny Morozov
The internet has changed how we connect and interact. You can play video games with people around the globe, order products directly from a manufacturer, or talk to old friends from high school. You can do all of this after quickly creating an account with your email address.
The ease and quickness of this are great for us and the companies building the platforms. We don’t have to go through pages of forms and registration and they get more users by lowering the barrier to sign up. You need to provide more information to get a library card than sign up for a Facebook account.
But what happens when this lack of information becomes a bad thing? When usernames and avatars are the default, the sense of anonymity can create a sense of dissonance between who you are IRL (in real life) and who you are online.
We’re in a time where bots are able to act more and more like real people. And now many services that used to be done in person, have to be done digitally due to COVID-19 and may stay online in the future.
We require a way to automatically and asynchronously verify someone’s identity. Some companies have built systems for themselves, but few public options available for everyone to use. Stripe, a global leader in payment processing, is now launching an ID verification system that can help with this exact problem. While still in beta, it supports 4,000 document types from 100+ countries.
A demo of the tool is available here: https://khw77.sse.codesandbox.io
Note — The data you provide won’t be verified
Here are some use cases of the impact that technology like this can have on ecommerce and online services.
Sneakers
That’s right, sneakers. Designer streetwear, like sneakers, is just one example of an industry that uses faux scarcity as part of their marketing strategy. By only making available a limited quantity of a product in a ‘drop’, sneaker companies like Nike and Adidas can virtually guarantee a sell-out every time — and get the PR that goes along with that to boot. The problem is, such a big underground market exists that there is a large incentive to cheat the system. Flippers buy products they know there will be a high demand for to sell at 3x a markup on a marketplace afterward. Some of them even use bots to purchase dozens of pairs.
Concert tickets and sports tickets are other examples of this, but any market that has a higher demand than supply is susceptible to this type of behavior.
Having the ability to authenticate someone based on their behavior on site would be one way to level the playing field. The problem with any type of verification right now is it cannot be done asynchronous or automatically — the verification gets put into a queue for review by real people.
Fraudulent Order Prevention
It can also be an effective fraud prevention method. For high value orders or in cases where the shipping and billing addresses are different, you can automatically request verification from the customer. This reduces manual intervention by customer service for fraudulent orders and prevents some automatic declines for legitimate orders. Longer term, implementing tools like this should reduce transaction fees, since a major component of those fees is to cover loss from fraud.
Alcohol
Americans spend over $230 billion a year on alcohol, but very little of it is done online. That’s not because people don’t want to though — in China, 55% of drinkers buy alcohol online. We’re a long way off at only 8%.
In the US, Drizly is probably the most well-known company in this space, but they function more like an Uber, connecting sellers to buyers via a software platform and arranging delivery. Drizly runs on a licensing fee basis, which could be cost-prohibitive for small stores, vineyards, or breweries. For a small startup CPG company, setting up a shop online is as easy as creating a Shopify account, but for alcohol retailers, it’s anything but easy.
Some of the biggest issues holding back innovation in this space have to do with customer identification; their age to be specific. Just like a liquor store or bar needs to confirm your age before you can purchase alcohol, an online retailer needs to as well. This is primarily done at the point of delivery by requiring an adult signature and ID check. For smaller sellers, having a check beforehand could go a long way in preventing legal issues down the line.
Alcohol is expensive to ship and customers don’t want to wait 5–7 days for a drink they’re craving now. But because of age verification, innovations like vending machines or pickup lockers have been difficult to develop or deemed too risky of an investment.
Online Dating
Popular dating apps like Tinder, Hinge, and Bumble provide ‘verified’ badges on people’s profiles. But the verification being done is just to show you aren’t a bot — not to determine if you are who you say you are. There are definitely reasons to be concerned with the amount of data these apps have on you already, so to give them even more data about you is something to be wary of. But that has to be weighed against the benefits and safety it could provide. That is why relying on a third party could be a good way to go. None of the data would have to be processed or stored within the app, and is reliant on a third party that could/should undergo auditing to provide transparency. Rather than relying on a walled garden, proprietary solutions like in use now.
Traveling
While it may feel uncomfortable or invasive to send pictures of your license out into the void of the internet, but one of the things that brought it into perspective for me is travel. Millions of people a year, myself included, use services like AirBnb and Vrbo to find places to stay around the world. Think how crazy it is that you spent $1,000+ on airfare to Europe to stay at an apartment that you’ve never seen that is owned by people you’ve never met…
These services do provide some verification and offer some protections against fraud, but is that really comforting at 11PM after a 8 hour transatlantic flight?
It works in the reverse as well — many renters on the platform are renting their space to complete strangers.
So it could be comforting for both parties to at least verify the other party is who they say they are. It might sound invasive to provide this kind of information about yourself, but you’re about to stay in a strangers house which is pretty invasive in and of itself.
Creating a Private & Safe Internet
To go back to the quote I started with, “anonymity, ‘virality,’ interconnectedness” are the internet’s greatest strengths and weaknesses. Having a third party whose business is dependent on its reputation for secure data processing may be the best way to counteract some of these weaknesses in a way that keeps people’s personal information safe and secure.